Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the
parent company of Bridgewater Bank (the Bank), today announced net
income of $13.7 million for the fourth quarter of 2022, a 5.4%
decrease from net income of $14.5 million for the third quarter of
2022, and a 9.8% increase from net income of $12.5 million for the
fourth quarter of 2021. Earnings per diluted common share for the
fourth quarter of 2022 were $0.45, a 5.6% decrease compared to
$0.47 per diluted common share for the third quarter of 2022, and a
14.2% increase compared to $0.39 per diluted common share for the
same period in 2021.
“Bridgewater delivered another strong year of financial results
in 2022 highlighted again by our robust balance sheet growth,
highly efficient business model and superb asset quality, with all
of these trends continuing in the fourth quarter,” said Chairman,
Chief Executive Officer and President, Jerry Baack. “As expected,
we also saw net interest margin compression during the quarter as
the persistent rising interest rate environment created additional
funding pressure given our strong loan growth. While we expect the
operating environment to remain challenging as we head into 2023,
we are taking steps to actively manage our balance sheet in the
near-term, with a focus on profitable growth, to drive sustained
success over the long-term.”
Fourth Quarter 2022 Financial
Results
Diluted
Adjusted
Nonperforming
ROA
PPNR ROA (1)
ROE
earnings per share
efficiency ratio (1)
assets to total assets
1.28
%
1.82
%
14.06
%
$
0.45
43.5
%
0.01
%
_________________________
(1)
Represents a non-GAAP financial measure.
See "Non-GAAP Financial Measures" for further details.
Fourth Quarter 2022 Highlights
- Diluted earnings per common share were $0.45, compared to $0.47
per common share for the third quarter of 2022.
- Pre-provision net revenue (PPNR), a non-GAAP financial measure,
of $19.5 million, compared to $21.4 million for the third quarter
of 2022, a decrease of $1.9 million, or 9.0%. PPNR ROA, a non-GAAP
financial measure, was 1.82%, compared to 2.15% for the third
quarter of 2022.
- Annualized return on average assets (ROA) and annualized return
on average shareholders’ equity (ROE) for the fourth quarter of
2022 were 1.28% and 14.06%, compared to ROA and ROE of 1.46% and
14.99%, respectively, for the third quarter of 2022. Annualized
return on average tangible common equity, a non-GAAP financial
measure, was 15.86% for the fourth quarter of 2022, compared to
17.03% for the third quarter of 2022.
- Gross loans increased $189.4 million, or 22.2% annualized, from
the third quarter of 2022.
- Deposits increased $111.5 million, or 13.4% annualized, from
the third quarter of 2022.
- Net interest margin (on a fully tax-equivalent basis) was
3.16%, compared to 3.53% in the third quarter of 2022. Core net
interest margin (on a fully tax-equivalent basis), a non-GAAP
financial measure which excludes the impact of loan fees and PPP
balances, interest, and fees, was 3.05%, compared to 3.38% in the
third quarter of 2022.
- Adjusted efficiency ratio, a non-GAAP financial measure which
excludes the impact of certain non-routine income and expenses from
noninterest expense, was 43.5%, compared to 39.4% for the third
quarter of 2022.
- A loan loss provision of $1.5 million was recorded to support
strong organic loan growth in the fourth quarter of 2022. The
allowance for loan losses to total loans was 1.34% at December 31,
2022, compared to 1.38% at September 30, 2022.
- Annualized net loan charge-offs (recoveries) as a percentage of
average loans were 0.00% for the fourth quarter of 2022, compared
to (0.03)% for the third quarter of 2022.
- Tangible book value per share, a non-GAAP financial measure,
increased $0.36, or 12.7% annualized, to $11.69 at December 31,
2022, compared to $11.33 at September 30, 2022.
Annual 2022 Highlights
- Diluted earnings per common share for the year ended December
31, 2022 were $1.72, a 12.0% increase, compared to $1.54 for the
year ended December 31, 2021.
- PPNR, a non-GAAP financial measure, was $79.7 million for the
year ended December 31, 2022, an increase of 18.8%, compared to
$67.1 million for the year ended December 31, 2021. PPNR ROA, a
non-GAAP financial measure, was 2.06% for the year ended December
31, 2022, compared to 2.10% for the year ended December 31,
2021.
- Gross loans increased $750.0 million at December 31, 2022, or
26.6%, compared to December 31, 2021.
- Deposits increased $470.3 million at December 31, 2022, or
16.0%, compared to December 31, 2021.
- Net interest margin (on a fully tax-equivalent basis) was 3.45%
for the year ended December 31, 2022, compared to 3.54% for the
year ended December 31, 2021. Core net interest margin (on a fully
tax-equivalent basis), a non-GAAP financial measure, for the year
ended December 31, 2022 was 3.27%, compared to 3.28% for the year
ended December 31, 2021.
- Adjusted efficiency ratio, a non-GAAP financial measure, was
41.2% for the year ended December 31, 2022, compared to 41.0% for
the year ended December 31, 2021.
- Net loan charge-offs (recoveries) as a percentage of average
loans were (0.01)% for the year ended December 31, 2022, compared
to 0.00% for the year ended December 31, 2021.
- The ratio of nonperforming assets to total assets was 0.01% at
December 31, 2022, compared to 0.02% at December 31, 2021.
- Tangible book value per share, a non-GAAP financial measure,
increased $0.71, or 6.5%, to $11.69 at December 31, 2022, compared
to $10.98 at December 31, 2021, despite the market value
depreciation of the securities portfolio due to rapidly rising
interest rates, which continue to negatively impact accumulated
other comprehensive income.
Key Financial Measures
As of and for the Three Months
Ended
As of and for the Year
Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Per Common Share Data
Basic Earnings Per Share
$
0.46
$
0.49
$
0.41
$
1.78
$
1.59
Diluted Earnings Per Share
0.45
0.47
0.39
1.72
1.54
Book Value Per Share
11.80
11.44
11.09
Tangible Book Value Per Share (1)
11.69
11.33
10.98
Basic Weighted Average Shares
Outstanding
27,558,983
27,520,117
28,004,334
27,758,336
28,027,454
Diluted Weighted Average Shares
Outstanding
28,527,306
28,592,854
29,038,785
28,668,177
28,968,286
Shares Outstanding at Period End
27,751,950
27,587,978
28,206,566
Selected Performance
Ratios
Return on Average Assets (Annualized)
1.28
%
1.46
%
1.46
%
1.38
%
1.43
%
Pre-Provision Net Revenue Return on
Average Assets (Annualized) (1)
1.82
2.15
2.11
2.06
2.10
Return on Average Shareholders' Equity
(Annualized)
14.06
14.99
13.27
13.90
14.45
Return on Average Tangible Common Equity
(Annualized) (1)
15.86
17.03
14.78
15.69
15.45
Yield on Interest Earning Assets(2)
4.67
4.37
4.06
4.35
4.16
Yield on Total Loans, Gross(2)
4.87
4.59
4.49
4.60
4.60
Cost of Total Deposits
1.31
0.73
0.45
0.75
0.51
Cost of Funds
1.67
0.93
0.61
0.99
0.68
Net Interest Margin (2)
3.16
3.53
3.51
3.45
3.54
Core Net Interest Margin (1)(2)
3.05
3.38
3.25
3.27
3.28
Efficiency Ratio (1)
43.8
39.8
40.8
41.5
42.0
Adjusted Efficiency Ratio (1)
43.5
39.4
40.3
41.2
41.0
Noninterest Expense to Average Assets
(Annualized)
1.42
1.42
1.45
1.46
1.51
Adjusted Noninterest Expense to Average
Assets (Annualized) (1)
1.41
1.41
1.43
1.45
1.47
Loan to Deposit Ratio
104.5
102.3
95.7
Core Deposits to Total Deposits (3)
74.6
83.0
85.4
Tangible Common Equity to Tangible Assets
(1)
7.48
7.57
8.91
Capital Ratios (Bank Only)
(4)
Tier 1 Leverage Ratio
10.76
%
11.24
%
11.09
%
Common Equity Tier 1 Risk-based Capital
Ratio
11.29
11.46
11.69
Tier 1 Risk-based Capital Ratio
11.29
11.46
11.69
Total Risk-based Capital Ratio
12.47
12.67
12.94
Capital Ratios (Consolidated)
(4)
Tier 1 Leverage Ratio
9.55
%
9.98
%
10.82
%
Common Equity Tier 1 Risk-based Capital
Ratio
8.40
8.47
9.36
Tier 1 Risk-based Capital Ratio
10.03
10.19
11.43
Total Risk-based Capital Ratio
13.15
13.78
15.55
_________________________
(1)
Represents a non-GAAP financial measure.
See "Non-GAAP Financial Measures" for further details.
(2)
Amounts calculated on a tax-equivalent
basis using the statutory federal tax rate of 21%.
(3)
Core deposits are defined as total
deposits less brokered deposits and certificates of deposit greater
than $250,000.
(4)
Preliminary data. Current period subject
to change prior to filings with applicable regulatory agencies.
Selected Financial Data
December 31,
September 30,
June 30,
March 31,
December 31,
(dollars in thousands)
2022
2022
2022
2022
2021
Selected Balance Sheet Data
Total Assets
$
4,345,662
$
4,128,987
$
3,883,264
$
3,607,920
$
3,477,659
Total Loans, Gross
3,569,446
3,380,082
3,225,885
2,987,967
2,819,472
Allowance for Loan Losses
47,996
46,491
44,711
41,692
40,020
Goodwill and Other Intangibles
2,914
2,962
3,009
3,057
3,105
Deposits
3,416,543
3,305,074
3,201,953
3,035,611
2,946,237
Tangible Common Equity (1)
324,636
312,531
305,360
309,870
309,653
Total Shareholders' Equity
394,064
382,007
374,883
379,441
379,272
Average Total Assets - Quarter-to-Date
4,251,345
3,948,201
3,743,575
3,513,798
3,403,270
Average Shareholders' Equity -
Quarter-to-Date
387,589
384,020
381,448
383,024
374,035
_________________________
(1)
Represents a non-GAAP financial measure.
See "Non-GAAP Financial Measures" for further details.
For the Three Months
Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(dollars in thousands)
2022
2022
2021
2022
2021
Selected Income Statement Data
Interest Income
$
48,860
$
42,359
$
33,775
$
163,695
$
128,879
Interest Expense
15,967
8,264
4,622
33,997
19,370
Net Interest Income
32,893
34,095
29,153
129,698
109,509
Provision for Loan Losses
1,500
1,500
1,150
7,700
5,150
Net Interest Income after Provision for
Loan Losses
31,393
32,595
28,003
121,998
104,359
Noninterest Income
1,738
1,387
1,288
6,332
5,309
Noninterest Expense
15,203
14,157
12,459
56,620
48,095
Income Before Income Taxes
17,928
19,825
16,832
71,710
61,573
Provision for Income Taxes
4,193
5,312
4,318
18,318
15,886
Net Income
13,735
14,513
12,514
53,392
45,687
Preferred Stock Dividends
(1,014
)
(1,013
)
(1,171
)
(4,054
)
(1,171
)
Net Income Available to Common
Shareholders
$
12,721
$
13,500
$
11,343
$
49,338
$
44,516
Income Statement
Net Interest Income
Net interest income was $32.9 million for the fourth quarter of
2022, a decrease of $1.2 million, or 3.5%, from $34.1 million in
the third quarter of 2022, and an increase of $3.7 million, or
12.8%, from $29.2 million in the fourth quarter of 2021. The
linked-quarter decrease in net interest income was due to higher
rates paid on deposits and increased borrowings in the rising
interest rate environment. The year-over-year increase in net
interest income was primarily due to growth in average interest
earning assets and higher yields on investment securities and core
loans, offset partially by higher rates paid on deposits and
borrowings. Average interest earning assets were $4.18 billion for
the fourth quarter of 2022, an increase of $305.7 million, or 7.9%,
from $3.87 billion for the third quarter of 2022, and an increase
of $857.0 million, or 25.8%, from $3.32 billion for the fourth
quarter of 2021. The linked-quarter increase in average interest
earning assets was primarily due to strong organic growth in the
loan portfolio and purchases of investment securities. The
year-over-year increase in average interest earning assets was
primarily due to strong organic growth in the loan portfolio and
purchases of investment securities, offset partially by the
forgiveness of PPP loans and the reduction of cash balances.
Net interest margin (on a fully tax-equivalent basis) for the
fourth quarter of 2022 was 3.16%, a 37 basis point decrease from
3.53% in the third quarter of 2022, and a 35 basis point decrease
from 3.51% in the fourth quarter of 2021. Core net interest margin
(on a fully tax-equivalent basis), a non-GAAP financial measure
which excludes the impact of loan fees and PPP balances, interest,
and fees, for the fourth quarter of 2022 was 3.05%, a 33 basis
point decrease from 3.38% in the third quarter of 2022, and a 20
basis point decrease from 3.25% in the fourth quarter of 2021. The
Company remains focused on managing the impact of continued
interest rate hikes and the evolving shape of the yield curve
during this unique interest rate environment.
As the PPP loan portfolio has almost fully paid off, the
recognition of fees associated with the originations has decreased
significantly, which impacts comparability between periods. The
Company recognized $45,000 of PPP origination fees during the
fourth quarter of 2022, compared to $90,000 during the third
quarter of 2022, and $958,000 during the fourth quarter of 2021.
There were no remaining PPP origination fees to be recognized as of
December 31, 2022.
Interest income was $48.9 million for the fourth quarter of
2022, an increase of $6.5 million, or 15.3%, from $42.4 million in
the third quarter of 2022, and an increase of $15.1 million, or
44.7%, from $33.8 million in the fourth quarter of 2021. The yield
on interest earning assets (on a fully tax-equivalent basis) was
4.67% in the fourth quarter of 2022, compared to 4.37% in the third
quarter of 2022, and 4.06% in the fourth quarter of 2021. The
linked-quarter increase in the yield on interest earning assets was
primarily due to the rapid increase in market interest rates
resulting in new loan originations, loans repricing, and investment
purchases at yields accretive to the existing portfolios. The
year-over-year increase in the yield on interest earning assets was
primarily due to growth and repricing of the loan and securities
portfolios in the rising interest rate environment, offset
partially by the lower recognition of PPP origination fees.
Loan interest income and loan fees remain the primary
contributing factors to the changes in the yield on interest
earning assets. The aggregate loan yield, excluding PPP loans,
increased to 4.86% in the fourth quarter of 2022, which was 27
basis points higher than 4.59% in the third quarter of 2022, and 45
basis points higher than 4.41% in the fourth quarter of 2021. While
loan fees have historically maintained a relatively stable
contribution to the aggregate loan yield, the recent periods were
impacted by fewer loan prepayments, which historically has
accelerated the recognition of loan fees. Despite the decrease in
fee recognition, the Company is encouraged that the core loan yield
continues to rise as new loan originations and the existing
portfolio loans reprice in the higher rate environment.
A summary of interest and fees recognized on loans, excluding
PPP loans, for the periods indicated is as follows:
Three Months Ended
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
Interest
4.74
%
4.42
%
4.17
%
4.15
%
4.20
%
Fees
0.12
0.17
0.26
0.25
0.21
Yield on Loans, Excluding PPP Loans
4.86
%
4.59
%
4.43
%
4.40
%
4.41
%
Interest expense was $16.0 million for the fourth quarter of
2022, an increase of $7.7 million, or 93.2%, from $8.3 million in
the third quarter of 2022, and an increase of $11.3 million, or
245.4%, from $4.6 million in the fourth quarter of 2021. The cost
of interest bearing liabilities increased 92 basis points on a
linked-quarter basis from 1.30% in the third quarter of 2022 to
2.22% in the fourth quarter of 2022, primarily due to higher rates
paid on deposits, drawing on the Company’s revolving line of
credit, and the increased utilization of federal funds purchased
and FHLB advances in the rising interest rate environment. On a
year-over-year basis, the cost of interest bearing liabilities
increased 136 basis points from 0.86% in the fourth quarter of 2021
to 2.22% in the fourth quarter of 2022, primarily due to the rapid
increase in market interest rates that occurred between the
periods, which impacted all funding sources.
Interest expense on deposits was $10.8 million for the fourth
quarter of 2022, an increase of $4.8 million, or 80.2%, from $6.0
million in the third quarter of 2022, and an increase of $7.5
million, or 232.6%, from $3.2 million in the fourth quarter of
2021. The cost of total deposits increased 58 basis points on a
linked-quarter basis from 0.73% in the third quarter of 2022, to
1.31% in the fourth quarter of 2022. On a year-over-year basis, the
cost of total deposits increased 86 basis points from 0.45% in the
fourth quarter of 2021, to 1.31% in the fourth quarter of 2022. The
linked-quarter and year-over-year increases were primarily due to
the upward repricing of the deposit portfolio in the higher
interest rate environment.
A summary of the Company’s average balances, interest yields and
rates, and net interest margin for the three months ended December
31, 2022, September 30, 2022, and December 31, 2021 is as
follows:
For the Three Months
Ended
December 31, 2022
September 30, 2022
December 31, 2021
Average
Interest
Yield/
Average
Interest
Yield/
Average
Interest
Yield/
Balance
& Fees
Rate
Balance
& Fees
Rate
Balance
& Fees
Rate
(dollars in thousands)
Interest Earning Assets:
Cash Investments
$
65,393
$
366
2.22
%
$
57,613
$
165
1.13
%
$
146,744
$
65
0.18
%
Investment Securities:
Taxable Investment Securities
540,601
5,268
3.87
461,255
3,741
3.22
341,325
1,893
2.20
Tax-Exempt Investment Securities (1)
67,867
728
4.26
75,801
799
4.18
71,602
782
4.33
Total Investment Securities
608,468
5,996
3.91
537,056
4,540
3.35
412,927
2,675
2.57
Paycheck Protection Program Loans (2)
1,109
48
17.06
2,424
96
15.75
39,900
1,057
10.51
Loans (1)(2)
3,481,041
42,654
4.86
3,263,390
37,724
4.59
2,715,722
30,154
4.41
Total Loans
3,482,150
42,702
4.87
3,265,814
37,820
4.59
2,755,622
31,211
4.49
Federal Home Loan Bank Stock
21,633
163
2.99
11,413
156
5.42
5,310
59
4.39
Total Interest Earning Assets
4,177,644
49,227
4.67
%
3,871,896
42,681
4.37
%
3,320,603
34,010
4.06
%
Noninterest Earning Assets
73,701
76,305
82,667
Total Assets
$
4,251,345
$
3,948,201
$
3,403,270
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
464,631
$
2,013
1.72
%
$
517,658
$
1,032
0.79
%
$
499,475
$
548
0.43
%
Savings and Money Market Deposits
1,048,227
4,533
1.72
999,932
2,494
0.99
803,848
876
0.43
Time Deposits
281,334
1,007
1.42
288,621
847
1.16
299,823
830
1.10
Brokered Deposits
537,351
3,228
2.38
447,034
1,612
1.43
404,438
987
0.97
Total Interest Bearing Deposits
2,331,543
10,781
1.83
2,253,245
5,985
1.05
2,007,584
3,241
0.64
Federal Funds Purchased
340,471
3,379
3.94
106,826
709
2.63
10
—
0.67
Notes Payable
11,359
202
7.04
—
—
—
—
—
—
FHLB Advances
94,103
575
2.42
72,343
328
1.80
44,185
162
1.46
Subordinated Debentures
81,242
1,030
5.03
92,503
1,242
5.33
92,189
1,219
5.25
Total Interest Bearing Liabilities
2,858,718
15,967
2.22
%
2,524,917
8,264
1.30
%
2,143,968
4,622
0.86
%
Noninterest Bearing
Liabilities:
Noninterest Bearing Transaction
Deposits
943,232
991,545
861,473
Other Noninterest Bearing Liabilities
61,806
47,719
23,794
Total Noninterest Bearing Liabilities
1,005,038
1,039,264
885,267
Shareholders' Equity
387,589
384,020
374,035
Total Liabilities and Shareholders'
Equity
$
4,251,345
$
3,948,201
$
3,403,270
Net Interest Income / Interest Rate
Spread
33,260
2.45
%
34,417
3.07
%
29,388
3.20
%
Net Interest Margin (3)
3.16
%
3.53
%
3.51
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and
Loans
(367
)
(322
)
(235
)
Net Interest Income
$
32,893
$
34,095
$
29,153
_________________________
(1)
Interest income and average rates for
tax-exempt investment securities and loans are presented on a
tax-equivalent basis, assuming a statutory federal income tax rate
of 21%.
(2)
Average loan balances include nonaccrual
loans. Interest income on loans includes amortization of deferred
loan fees, net of deferred loan costs.
(3)
Net interest margin includes the tax
equivalent adjustment and represents the annualized results of: (i)
the difference between interest income on interest earning assets
and the interest expense on interest bearing liabilities, divided
by (ii) average interest earning assets for the period.
Provision for Loan Losses
The provision for loan losses was $1.5 million for both the
third and fourth quarter of 2022 and $350,000 higher than the $1.2
million provided in the fourth quarter of 2021. The provision
recorded in the fourth quarter of 2022 was primarily attributable
to the growth of the loan portfolio. The allowance for loan losses
to total loans was 1.34% at December 31, 2022, compared to 1.38% at
September 30, 2022, and 1.42% at December 31, 2021.
As an emerging growth company, the Company anticipates adopting
Accounting Standards Update No. 2016-13 “Financial Instruments –
Credit Losses (Topic 326): Measurement of Credit Losses of
Financial Instruments,” as of January 1, 2023 and does not expect a
material adjustment upon adoption. The current estimate and future
calculations are highly dependent on loan composition,
macroeconomic conditions and forecasts, and other management
assumptions and judgements.
The following table presents the activity in the Company’s
allowance for loan losses for the periods indicated:
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(dollars in thousands)
2022
2022
2021
2022
2021
Balance at Beginning of Period
$
46,491
$
44,711
$
38,901
$
40,020
$
34,841
Provision for Loan Losses
1,500
1,500
1,150
7,700
5,150
Charge-offs
(3
)
(5
)
(37
)
(37
)
(74
)
Recoveries
8
285
6
313
103
Balance at End of Period
$
47,996
$
46,491
$
40,020
$
47,996
$
40,020
Noninterest Income
Noninterest income was $1.7 million for the fourth quarter of
2022, an increase of $351,000 from $1.4 million for the third
quarter of 2022, and an increase of $450,000 from $1.3 million for
the fourth quarter of 2021. The linked-quarter increase was
primarily due to an increase in other income, which included
$306,000 of rate lock fees, offset partially by a decrease in
letter of credit fees. The year-over-year increase was primarily
due to increased customer service fees, an increase in bank-owned
life insurance income and an increase in other income, offset
partially by decreased letter of credit fees.
The following table presents the major components of noninterest
income for the periods indicated:
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(dollars in thousands)
2022
2022
2021
2022
2021
Noninterest Income:
Customer Service Fees
$
344
$
313
$
274
$
1,236
$
1,007
Net Gain on Sales of Securities
30
—
—
82
750
Letter of Credit Fees
358
428
541
1,592
1,676
Debit Card Interchange Fees
148
153
149
586
563
Swap Fees
—
—
—
557
—
Bank-Owned Life Insurance
238
227
150
762
316
Other Income
620
266
174
1,517
997
Totals
$
1,738
$
1,387
$
1,288
$
6,332
$
5,309
Noninterest Expense
Noninterest expense was $15.2 million for the fourth quarter of
2022, an increase of $1.0 million from $14.2 million for the third
quarter of 2022, and an increase of $2.7 million from $12.5 million
for the fourth quarter of 2021. The linked-quarter increase was
primarily due to increases in salaries and employee benefits,
derivative collateral fees, and other expense. The year-over-year
increase was primarily attributable to increases in salaries and
employee benefits, occupancy and equipment, and derivative
collateral fees.
The following table presents the major components of noninterest
expense for the periods indicated:
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
(dollars in thousands)
2022
2022
2021
2022
2021
Noninterest Expense:
Salaries and Employee Benefits
$
9,821
$
9,449
$
7,966
$
36,941
$
30,889
Occupancy and Equipment
1,177
1,086
939
4,390
3,916
FDIC Insurance Assessment
360
315
345
1,365
1,305
Data Processing
371
372
306
1,396
1,222
Professional and Consulting Fees
635
594
718
2,664
2,520
Derivative Collateral Fees
535
122
1
687
3
Information Technology and
Telecommunications
673
650
554
2,495
2,163
Marketing and Advertising
403
479
469
2,032
1,487
Intangible Asset Amortization
48
48
48
191
191
Amortization of Tax Credit Investments
114
114
152
408
562
Debt Prepayment Fees
—
—
—
—
582
Other Expense
1,066
928
961
4,051
3,255
Totals
$
15,203
$
14,157
$
12,459
$
56,620
$
48,095
The Company continues to invest in its people across the
organization, with 246 full-time equivalent employees at December
31, 2022, and September 30, 2022, and 220 employees at December 31,
2021.
The efficiency ratio, a non-GAAP financial measure, was 43.8%
for the fourth quarter of 2022, compared to 39.8% for the third
quarter of 2022, and 40.8% for the fourth quarter of 2021.
Excluding the impact of certain non-routine income and expenses,
the adjusted efficiency ratio, a non-GAAP financial measure, was
43.5% for the fourth quarter of 2022, 39.4% for the third quarter
of 2022, and 40.3% for the fourth quarter of 2021.
Income Taxes
The effective combined federal and state income tax rate for the
fourth quarter of 2022 was 23.4%, a decrease from 26.8% for the
third quarter of 2022 and 25.7% for the fourth quarter of 2021.
Balance Sheet
Total assets at December 31, 2022 were $4.35 billion, a 5.2%
increase from $4.13 billion at September 30, 2022, and a 25.0%
increase from $3.48 billion at December 31, 2021. The
linked-quarter increase in total assets was primarily due to strong
organic loan growth and continued purchases of investment
securities. The year-over-year increase in total assets was
primarily due to strong organic loan growth, purchases of
investment securities and an increase of other assets, offset
partially by a decrease in cash and cash equivalents.
Total gross loans at December 31, 2022 were $3.57 billion, an
increase of $189.4 million, or 5.6%, over total gross loans of
$3.38 billion at September 30, 2022, and an increase of $750.0
million, or 26.6%, over total gross loans of $2.82 billion at
December 31, 2021. The increase in the loan portfolio during the
fourth quarter of 2022 was primarily due to growth in the
construction and land development, multifamily, and CRE nonowner
occupied segments.
The following table presents the dollar composition of the
Company’s loan portfolio, by category, at the dates indicated:
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
(dollars in thousands)
Commercial
$
435,344
$
412,448
$
403,569
$
363,290
$
360,169
Paycheck Protection Program
1,049
1,192
4,860
12,309
26,162
Construction and Land Development
365,796
335,557
359,191
321,131
281,474
Real Estate Mortgage:
1 - 4 Family Mortgage
355,474
341,102
334,815
312,201
305,317
Multifamily
1,306,738
1,230,509
1,087,865
1,012,623
910,243
CRE Owner Occupied
149,905
151,088
142,214
117,969
111,096
CRE Nonowner Occupied
947,008
900,691
886,432
840,463
818,569
Total Real Estate Mortgage Loans
2,759,125
2,623,390
2,451,326
2,283,256
2,145,225
Consumer and Other
8,132
7,495
6,939
7,981
6,442
Total Loans, Gross
3,569,446
3,380,082
3,225,885
2,987,967
2,819,472
Allowance for Loan Losses
(47,996
)
(46,491
)
(44,711
)
(41,692
)
(40,020
)
Net Deferred Loan Fees
(9,293
)
(9,088
)
(9,536
)
(9,065
)
(9,535
)
Total Loans, Net
$
3,512,157
$
3,324,503
$
3,171,638
$
2,937,210
$
2,769,917
Total deposits at December 31, 2022 were $3.42 billion, an
increase of $111.5 million, or 3.4%, over total deposits of $3.31
billion at September 30, 2022, and an increase of $470.3 million,
or 16.0%, over total deposits of $2.95 billion at December 31,
2021. Deposit growth in the fourth quarter of 2022 was primarily
due to an increase in brokered deposits, offset partially by a
decline in all other deposit portfolios. Brokered deposits were
being used as a supplemental funding source, as needed, to support
the loan portfolio growth.
The following table presents the dollar composition of the
Company’s deposit portfolio, by category, at the dates
indicated:
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
(dollars in thousands)
Noninterest Bearing Transaction
Deposits
$
884,272
$
961,084
$
961,998
$
835,482
$
875,084
Interest Bearing Transaction Deposits
451,992
510,396
522,151
598,402
544,789
Savings and Money Market Deposits
1,031,873
1,077,333
952,138
890,926
863,567
Time Deposits
272,253
293,052
272,424
286,674
293,474
Brokered Deposits
776,153
463,209
493,242
424,127
369,323
Total Deposits
$
3,416,543
$
3,305,074
$
3,201,953
$
3,035,611
$
2,946,237
Capital
Total shareholders’ equity at December 31, 2022 was $394.1
million, an increase of $12.1 million compared to total
shareholders’ equity of $382.0 million at September 30, 2022, and
an increase of $14.8 million, or 3.9%, over total shareholders’
equity of $379.3 million at December 31, 2021. The linked-quarter
increase was due to net income retained, offset partially by
unrealized losses in the securities portfolio. The year-over-year
increase was due to net income retained and unrealized gains in the
derivatives portfolio, offset partially by stock repurchases made
under the Company’s stock repurchase program and an increase in
unrealized losses in the securities portfolio. The Company did not
purchase any shares of its common stock during the fourth quarter
of 2022.
Tangible book value per share, a non-GAAP financial measure, was
$11.69 as of December 31, 2022, an increase of 3.2% from $11.33 as
of September 30, 2022, and an increase of 6.5% from $10.98 as of
December 31, 2021. The linked-quarter and year-over-year increase
occurred despite the market value depreciation of the securities
portfolio driven by the rapidly rising interest rate environment,
which continues to negatively impact accumulated other
comprehensive income. Tangible common equity as a percentage of
tangible assets, a non-GAAP financial measure, was 7.48% at
December 31, 2022, compared to 7.57% at September 30, 2022, and
8.91% at December 31, 2021.
Today, the Company also announced that its Board of Directors
declared a quarterly cash dividend on its 5.875% Non-Cumulative
Perpetual Preferred Stock, Series A (Series A Preferred Stock). The
quarterly cash dividend of $36.72 per share, equivalent to $0.3672
per depositary share, each representing a 1/100th interest in a
share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable
on March 1, 2023 to shareholders of record of the Series A
Preferred Stock at the close of business on February 15, 2023.
Asset Quality
Annualized net charge-offs (recoveries) as a percent of average
loans were 0.00% for the fourth quarter of 2022, compared to
(0.03)% for the third quarter of 2022 and 0.00% for each of the
previous three quarters. At December 31, 2022, the Company’s
nonperforming assets, which include nonaccrual loans, loans past
due 90 days and still accruing, and foreclosed assets, were
$639,000, or 0.01% of total assets, as compared to $663,000, or
0.02% of total assets at September 30, 2022, and $722,000, or 0.02%
of total assets at December 31, 2021.
Loans that have potential weaknesses that warrant a watchlist
risk rating at December 31, 2022 totaled $32.3 million, compared to
$22.8 million at September 30, 2022, and $49.3 million at December
31, 2021. The linked-quarter increase was primarily due to the
migration of two loan relationships. The increased uncertainty in
the economic environment may result in further watchlist or adverse
classifications in the loan portfolio. Loans that warranted a
substandard risk rating at December 31, 2022 totaled $28.0 million,
compared to $30.8 million at September 30, 2022, and $22.6 million
at December 31, 2021.
The following table presents a summary of asset quality
measurements at the dates indicated:
As of and for the Three Months
Ended
December 31,
September 30,
June 30,
March 31,
December 31,
(dollars in thousands)
2022
2022
2022
2022
2021
Selected Asset Quality Data
Loans 30-89 Days Past Due
$
186
$
38
$
225
$
13
$
49
Loans 30-89 Days Past Due to Total
Loans
0.01
%
0.00
%
0.01
%
0.00
%
0.00
%
Nonperforming Loans
$
639
$
663
$
688
$
706
$
722
Nonperforming Loans to Total Loans
0.02
%
0.02
%
0.02
%
0.02
%
0.03
%
Foreclosed Assets
$
—
$
—
$
—
$
—
$
—
Nonaccrual Loans to Total Loans
0.02
%
0.02
%
0.02
%
0.02
%
0.03
%
Nonaccrual Loans and Loans Past Due 90
Days and Still Accruing to Total Loans
0.02
0.02
0.02
0.02
0.03
Nonperforming Assets (1)
$
639
$
663
$
688
$
706
$
722
Nonperforming Assets to Total Assets
(1)
0.01
%
0.02
%
0.02
%
0.02
%
0.02
%
Allowance for Loan Losses to Total
Loans
1.34
1.38
1.39
1.40
1.42
Allowance for Loan Losses to Total Loans,
Excluding PPP Loans
1.35
1.38
1.39
1.40
1.43
Allowance for Loans Losses to Nonaccrual
Loans
7,511.11
7,012.22
6,498.69
5,905.38
5,542.94
Net Loan Charge-Offs (Recoveries)
(Annualized) to Average Loans
0.00
(0.03)
0.00
0.00
0.00
_________________________
(1)
Nonperforming assets are defined as
nonaccrual loans plus loans 90 days past due and still accruing
plus foreclosed assets.
The Company will host a conference call to discuss its fourth
quarter 2022 financial results on Thursday, January 26, 2023 at
8:00 a.m. Central Time. The conference call can be accessed by
dialing 877-270-2148 and requesting to join the Bridgewater
Bancshares earnings call. To listen to a replay of the conference
call via phone, please dial 877-344-7529 and enter access code
1810249. The replay will be available through February 2, 2023. The
conference call will also be available via a live webcast on the
Investor Relations section of the Company’s website,
investors.bridgewaterbankmn.com, and archived for replay.
About the Company
Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park,
Minnesota-based financial holding company. Bridgewater's banking
subsidiary, Bridgewater Bank, is a premier, full-service Twin
Cities bank dedicated to serving the diverse needs of commercial
real estate investors, entrepreneurs, business clients and
successful individuals. By pairing a range of deposit, lending, and
business services solutions with a responsive service model,
Bridgewater has seen continuous growth and profitability. With
total assets of $4.3 billion and seven branches as of December 31,
2022, Bridgewater is considered one of the largest locally led
banks in the State of Minnesota, and has received numerous awards
for its growth, banking services, and esteemed corporate
culture.
Use of Non-GAAP financial measures
In addition to the results presented in accordance with U.S.
Generally Accepted Accounting Principles (GAAP), the Company
routinely supplements its evaluation with an analysis of certain
non-GAAP financial measures. The Company believes these non-GAAP
financial measures, in addition to the related GAAP measures,
provide meaningful information to investors to help them understand
the Company’s operating performance and trends, and to facilitate
comparisons with the performance of peers. These disclosures should
not be viewed as a substitute for operating results determined in
accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
companies. Reconciliations of non-GAAP disclosures used in this
earnings release to the comparable GAAP measures are provided in
the accompanying tables.
Forward-Looking Statements
This earnings release contains “forward-looking statements”
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, statements concerning
plans, estimates, calculations, forecasts and projections with
respect to the anticipated future performance of the Company. These
statements are often, but not always, identified by words such as
“may”, “might”, “should”, “could”, “predict”, “potential”,
“believe”, “expect”, “continue”, “will”, “anticipate”, “seek”,
“estimate”, “intend”, “plan”, “projection”, “would”, “annualized”,
“target” and “outlook”, or the negative version of those words or
other comparable words of a future or forward-looking nature.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding our
business, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of our
control. Our actual results and financial condition may differ
materially from those indicated in the forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements. Important factors that could cause our actual results
and financial condition to differ materially from those indicated
in the forward-looking statements include, among others, the
following: interest rate risk, including the effects of recent and
anticipated rate increases by the Federal Reserve; fluctuations in
the values of the securities held in our securities portfolio,
including as the result of rising interest rates, which has
resulted in unrealized losses in our portfolio; business and
economic conditions generally and in the financial services
industry, nationally and within our market area, including rising
rates of inflation; loan concentrations in our portfolio; the
overall health of the local and national real estate market; our
ability to successfully manage credit risk; our ability to maintain
an adequate level of allowance for loan losses; new or revised
accounting standards, including as a result of the implementation
of the Current Expected Credit Loss standard; the concentration of
large loans to certain borrowers; the concentration of large
deposits from certain clients; our ability to successfully manage
liquidity risk, which may increase our dependence on non-core
funding sources such as brokered deposits, and negatively impact
our cost of funds; our ability to raise additional capital to
implement our business plan; our ability to implement our growth
strategy and manage costs effectively; developments and uncertainty
related to the future use and availability of some reference rates,
such as the expected discontinuation of the London Interbank
Offered Rate, as well as other alternative reference rates; the
composition of our senior leadership team and our ability to
attract and retain key personnel; talent and labor shortages and
high rates of employee turnover; the occurrence of fraudulent
activity, breaches or failures of our information security controls
or cybersecurity-related incidents; interruptions involving our
information technology and telecommunications systems or
third-party servicers; competition in the financial services
industry, including from nonbank competitors such as credit unions
and “fintech” companies; the effectiveness of our risk management
framework; the commencement and outcome of litigation and other
legal proceedings and regulatory actions against us; the impact of
recent and future legislative and regulatory changes, including
changes to federal and state corporate tax rates; risks related to
climate change and the negative impact it may have on our customers
and their businesses; the imposition of tariffs or other
governmental policies impacting the value of products produced by
our commercial borrowers; severe weather, natural disasters, wide
spread disease or pandemics (including the COVID-19 pandemic), acts
of war or terrorism or other adverse external events including the
Russian invasion of Ukraine; potential impairment to the goodwill
we recorded in connection with our past acquisition; changes to
U.S. or state tax laws, regulations and guidance, including the new
1% excise tax on stock buybacks by publicly traded companies; and
any other risks described in the “Risk Factors” sections of reports
filed by the Company with the Securities and Exchange
Commission.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. We undertake no obligation
to publicly update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
Bridgewater Bancshares, Inc. and
Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share
data)
December 31,
September 30,
December 31,
2022
2022
2021
ASSETS
Cash and Cash Equivalents
$
87,043
$
75,496
$
143,473
Bank-Owned Certificates of Deposit
1,181
1,182
1,876
Securities Available for Sale, at Fair
Value
548,613
542,007
439,362
Loans, Net of Allowance for Loan Losses of
$47,996 at December 31, 2022 (unaudited), $46,491 at September 30,
2022 (unaudited) and $40,020 at December 31, 2021
3,512,157
3,324,503
2,769,917
Federal Home Loan Bank (FHLB) Stock, at
Cost
19,606
15,603
5,242
Premises and Equipment, Net
48,445
48,941
49,395
Accrued Interest
13,479
11,198
9,186
Goodwill
2,626
2,626
2,626
Other Intangible Assets, Net
288
336
479
Other Assets
112,224
107,095
56,103
Total Assets
$
4,345,662
$
4,128,987
$
3,477,659
LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing
$
884,272
$
961,084
$
875,084
Interest Bearing
2,532,271
2,343,990
2,071,153
Total Deposits
3,416,543
3,305,074
2,946,237
Federal Funds Purchased
287,000
212,000
—
Notes Payable
13,750
—
—
FHLB Advances
97,000
71,500
42,500
Subordinated Debentures, Net of Issuance
Costs
78,905
92,559
92,239
Accrued Interest Payable
2,831
2,214
1,409
Other Liabilities
55,569
63,633
16,002
Total Liabilities
3,951,598
3,746,980
3,098,387
SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value;
Authorized 10,000,000
Preferred Stock - Issued and Outstanding
27,600 Series A shares ($2,500 liquidation preference) at December
31, 2022 (unaudited), September 30, 2022 (unaudited) and December
31, 2021
66,514
66,514
66,514
Common Stock- $0.01 par value; Authorized
75,000,000
Common Stock - Issued and Outstanding
27,751,950 at December 31, 2022 (unaudited), 27,587,978 at
September 30, 2022 (unaudited) and 28,206,566 at December 31,
2021
278
276
282
Additional Paid-In Capital
96,529
95,973
104,123
Retained Earnings
248,685
235,964
199,347
Accumulated Other Comprehensive Income
(Loss)
(17,942
)
(16,720
)
9,006
Total Shareholders' Equity
394,064
382,007
379,272
Total Liabilities and Equity
$
4,345,662
$
4,128,987
$
3,477,659
Bridgewater Bancshares, Inc. and
Subsidiaries
Consolidated Statements of
Income
(dollars in thousands, except per share
data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
INTEREST INCOME
Loans, Including Fees
$
42,488
$
37,666
$
31,140
$
146,256
$
118,845
Investment Securities
5,843
4,372
2,511
16,410
9,576
Other
529
321
124
1,029
458
Total Interest Income
48,860
42,359
33,775
163,695
128,879
INTEREST EXPENSE
Deposits
10,781
5,984
3,241
23,379
13,842
Notes Payable
202
—
—
202
61
FHLB Advances
575
329
162
1,221
831
Subordinated Debentures
1,030
1,242
1,219
4,688
4,630
Federal Funds Purchased
3,379
709
—
4,507
6
Total Interest Expense
15,967
8,264
4,622
33,997
19,370
NET INTEREST INCOME
32,893
34,095
29,153
129,698
109,509
Provision for Loan Losses
1,500
1,500
1,150
7,700
5,150
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
31,393
32,595
28,003
121,998
104,359
NONINTEREST INCOME
Customer Service Fees
344
313
274
1,236
1,007
Net Gain on Sales of Available for Sale
Securities
30
—
—
82
750
Other Income
1,364
1,074
1,014
5,014
3,552
Total Noninterest Income
1,738
1,387
1,288
6,332
5,309
NONINTEREST EXPENSE
Salaries and Employee Benefits
9,821
9,449
7,966
36,941
30,889
Occupancy and Equipment
1,177
1,086
939
4,390
3,916
Other Expense
4,205
3,622
3,554
15,289
13,290
Total Noninterest Expense
15,203
14,157
12,459
56,620
48,095
INCOME BEFORE INCOME TAXES
17,928
19,825
16,832
71,710
61,573
Provision for Income Taxes
4,193
5,312
4,318
18,318
15,886
NET INCOME
13,735
14,513
12,514
53,392
45,687
Preferred Stock Dividends
(1,014
)
(1,013
)
(1,171
)
(4,054
)
(1,171
)
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS
$
12,721
$
13,500
$
11,343
$
49,338
$
44,516
EARNINGS PER SHARE
Basic
$
0.46
$
0.49
$
0.41
$
1.78
$
1.59
Diluted
0.45
0.47
0.39
1.72
1.54
Dividends Paid Per Common Share
—
—
—
—
—
Bridgewater Bancshares, Inc. and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
(dollars in thousands, except per share
data)
(Unaudited)
For the Year Ended
December 31, 2022
December 31, 2021
Average
Interest
Yield/
Average
Interest
Yield/
Balance
& Fees
Rate
Balance
& Fees
Rate
(dollars in thousands)
Interest Earning Assets:
Cash Investments
$
66,072
$
597
0.90
%
$
132,188
$
199
0.15
%
Investment Securities:
Taxable Investment Securities
448,500
13,960
3.11
317,954
7,015
2.21
Tax-Exempt Investment Securities (1)
72,379
3,101
4.29
75,313
3,242
4.30
Total Investment Securities
520,879
17,061
3.28
393,267
10,257
2.61
Paycheck Protection Program Loans (2)
7,441
970
13.03
103,151
6,441
6.24
Loans (1)(2)
3,183,271
145,857
4.58
2,481,706
112,587
4.54
Total Loans
3,190,712
146,827
4.60
2,584,857
119,028
4.60
Federal Home Loan Bank Stock
12,628
432
3.42
5,571
259
4.65
Total Interest Earning Assets
3,790,291
164,917
4.35
%
3,115,883
129,743
4.16
%
Noninterest Earning Assets
76,189
73,917
Total Assets
$
3,866,480
$
3,189,800
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
524,968
$
4,336
0.83
%
$
441,528
$
2,052
0.46
%
Savings and Money Market Deposits
963,096
9,129
0.95
773,779
3,729
0.48
Time Deposits
284,868
3,264
1.15
323,638
4,099
1.27
Brokered Deposits
449,095
6,650
1.48
406,863
3,962
0.97
Total Interest Bearing Deposits
2,222,027
23,379
1.05
1,945,808
13,842
0.71
Federal Funds Purchased
149,608
4,507
3.01
2,479
6
0.24
Notes Payable
2,863
202
7.04
1,658
61
3.66
FHLB Advances
64,278
1,221
1.90
53,294
831
1.56
Subordinated Debentures
89,584
4,688
5.23
82,865
4,630
5.59
Total Interest Bearing Liabilities
2,528,360
33,997
1.34
%
2,086,104
19,370
0.93
%
Noninterest Bearing
Liabilities:
Noninterest Bearing Transaction
Deposits
910,490
764,087
Other Noninterest Bearing Liabilities
43,597
23,372
Total Noninterest Bearing Liabilities
954,087
787,459
Shareholders' Equity
384,033
316,237
Total Liabilities and Shareholders'
Equity
$
3,866,480
$
3,189,800
Net Interest Income / Interest Rate
Spread
130,920
3.01
%
110,373
3.23
%
Net Interest Margin (3)
3.45
%
3.54
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and
Loans
(1,222
)
(864
)
Net Interest Income
$
129,698
$
109,509
_________________________
(1)
Interest income and average rates for
tax-exempt investment securities and loans are presented on a
tax-equivalent basis, assuming a statutory federal income tax rate
of 21%
(2)
Average loan balances include nonaccrual
loans. Interest income on loans includes amortization of deferred
loan fees, net of deferred loan costs.
(3)
Net interest margin includes the tax
equivalent adjustment and represents the annualized results of: (i)
the difference between interest income on interest earning assets
and the interest expense on interest bearing liabilities, divided
by (ii) average interest earning assets for the period.
Bridgewater Bancshares, Inc. and
Subsidiaries
Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
For the Three Months
Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Pre-Provision Net Revenue
Noninterest Income
$
1,738
$
1,387
$
1,288
$
6,332
$
5,309
Less: Gain on Sales of Securities
(30
)
—
—
(82
)
(750
)
Total Operating Noninterest
Income
1,708
1,387
1,288
6,250
4,559
Plus: Net Interest Income
32,893
34,095
29,153
129,698
109,509
Net Operating Revenue
$
34,601
$
35,482
$
30,441
$
135,948
$
114,068
Noninterest Expense
$
15,203
$
14,157
$
12,459
$
56,620
$
48,095
Less: Amortization of Tax Credit
Investments
(114
)
(114
)
(152
)
(408
)
(562
)
Less: Debt Prepayment Fees
—
—
—
—
(582
)
Total Operating Noninterest
Expense
$
15,089
$
14,043
$
12,307
$
56,212
$
46,951
Pre-Provision Net Revenue
$
19,512
$
21,439
$
18,134
$
79,736
$
67,117
Plus:
Non-Operating Revenue Adjustments
30
—
—
82
750
Less:
Provision for Loan Losses
1,500
1,500
1,150
7,700
5,150
Non-Operating Expense Adjustments
114
114
152
408
1,144
Provision for Income Taxes
4,193
5,312
4,318
18,318
15,886
Net Income
$
13,735
$
14,513
$
12,514
$
53,392
$
45,687
Average Assets
$
4,251,345
$
3,948,201
$
3,403,270
$
3,866,480
$
3,189,800
Pre-Provision Net Revenue Return on
Average Assets
1.82
%
2.15
%
2.11
%
2.06
%
2.10
%
As of and for the Three Months
Ended
As of and for the Year
Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Core Net Interest Margin
Net Interest Income (Tax-Equivalent
Basis)
$
33,260
$
34,417
$
29,388
$
130,920
$
110,373
Less: Loan Fees
(1,100
)
(1,400
)
(1,462
)
(6,273
)
(5,173
)
Less: PPP Interest and Fees
(48
)
(96
)
(1,057
)
(970
)
(6,441
)
Core Net Interest Income
$
32,112
$
32,921
$
26,869
$
123,677
$
98,759
Average Interest Earning Assets
$
4,177,644
$
3,871,896
$
3,320,603
$
3,790,291
$
3,115,883
Less: Average PPP Loans
(1,109
)
(2,424
)
(39,900
)
(7,441
)
(103,151
)
Core Average Interest Earning Assets
$
4,176,535
$
3,869,472
$
3,280,703
$
3,782,850
$
3,012,732
Core Net Interest Margin
3.05
%
3.38
%
3.25
%
3.27
%
3.28
%
Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
For the Three Months
Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Efficiency Ratio
Noninterest Expense
$
15,203
$
14,157
$
12,459
$
56,620
$
48,095
Less: Amortization of Intangible
Assets
(48
)
(48
)
(48
)
(191
)
(191
)
Adjusted Noninterest Expense
$
15,155
$
14,109
$
12,411
$
56,429
$
47,904
Net Interest Income
32,893
34,095
29,153
129,698
109,509
Noninterest Income
1,738
1,387
1,288
6,332
5,309
Less: Gain on Sales of Securities
(30
)
—
—
(82
)
(750
)
Adjusted Operating Revenue
$
34,601
$
35,482
$
30,441
$
135,948
$
114,068
Efficiency Ratio
43.8
%
39.8
%
40.8
%
41.5
%
42.0
%
Adjusted Efficiency Ratio
Noninterest Expense
$
15,203
$
14,157
$
12,459
$
56,620
$
48,095
Less: Amortization of Tax Credit
Investments
(114
)
(114
)
(152
)
(408
)
(562
)
Less: Debt Prepayment Fees
—
—
—
—
(582
)
Less: Amortization of Intangible
Assets
(48
)
(48
)
(48
)
(191
)
(191
)
Adjusted Noninterest Expense
$
15,041
$
13,995
$
12,259
$
56,021
$
46,760
Net Interest Income
32,893
34,095
29,153
129,698
109,509
Noninterest Income
1,738
1,387
1,288
6,332
5,309
Less: Gain on Sales of Securities
(30
)
—
—
(82
)
(750
)
Adjusted Operating Revenue
$
34,601
$
35,482
$
30,441
$
135,948
$
114,068
Adjusted Efficiency Ratio
43.5
%
39.4
%
40.3
%
41.2
%
41.0
%
For the Three Months
Ended
For the Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Adjusted Noninterest Expense to Average
Assets (Annualized)
Noninterest Expense
$
15,203
$
14,157
$
12,459
$
56,620
$
48,095
Less: Amortization of Tax Credit
Investments
(114
)
(114
)
(152
)
(408
)
(562
)
Less: Debt Prepayment Fees
—
—
—
—
(582
)
Adjusted Noninterest Expense
$
15,089
$
14,043
$
12,307
$
56,212
$
46,951
Average Assets
$
4,251,345
$
3,948,201
$
3,403,270
$
3,866,480
$
3,189,800
Adjusted Noninterest Expense to Average
Assets (Annualized)
1.41
%
1.41
%
1.43
%
1.45
%
1.47
%
Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
As of and for the Three Months
Ended
As of and for the Year
Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2022
2022
2021
2022
2021
Tangible Common Equity and Tangible
Common Equity/Tangible Assets
Total Shareholders' Equity
$
394,064
$
382,007
$
379,272
Less: Preferred Stock
(66,514
)
(66,514
)
(66,514
)
Total Common Shareholders' Equity
327,550
315,493
312,758
Less: Intangible Assets
(2,914
)
(2,962
)
(3,105
)
Tangible Common Equity
$
324,636
$
312,531
$
309,653
Total Assets
$
4,345,662
$
4,128,987
$
3,477,659
Less: Intangible Assets
(2,914
)
(2,962
)
(3,105
)
Tangible Assets
$
4,342,748
$
4,126,025
$
3,474,554
Tangible Common Equity/Tangible Assets
7.48
%
7.57
%
8.91
%
Tangible Book Value Per Share
Book Value Per Common Share
$
11.80
$
11.44
$
11.09
Less: Effects of Intangible Assets
(0.11
)
(0.11
)
(0.11
)
Tangible Book Value Per Common Share
$
11.69
$
11.33
$
10.98
Return on Average Tangible Common
Equity
Net Income Available to Common
Shareholders
$
12,721
$
13,500
$
11,343
$
49,338
$
44,516
Average Shareholders' Equity
$
387,589
$
384,020
$
374,035
$
384,033
$
316,237
Less: Average Preferred Stock
(66,514
)
(66,514
)
(66,515
)
(66,514
)
(24,915
)
Average Common Equity
321,075
317,506
307,520
317,519
291,322
Less: Effects of Average Intangible
Assets
(2,941
)
(2,989
)
(3,132
)
(3,012
)
(3,204
)
Average Tangible Common Equity
$
318,134
$
314,517
$
304,388
$
314,507
$
288,118
Return on Average Tangible Common
Equity
15.86
%
17.03
%
14.78
%
15.69
%
15.45
%
Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
2022
2022
2022
2022
2021
Tangible Common Equity
Total Shareholders' Equity
$
394,064
$
382,007
$
374,883
$
379,441
$
379,272
Less: Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Common Shareholders' Equity
327,550
315,493
308,369
312,927
312,758
Less: Intangible Assets
(2,914
)
(2,962
)
(3,009
)
(3,057
)
(3,105
)
Tangible Common Equity
$
324,636
$
312,531
$
305,360
$
309,870
$
309,653
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version on businesswire.com: https://www.businesswire.com/news/home/20230124006142/en/
Media Contact: Jessica Stejskal | SVP Marketing
Jessica.stejskal@bwbmn.com | 952.893.6860 Investor
Contact: Justin Horstman | Director of Investor Relations
Justin.Horstman@bwbmn.com | 952.542.5169
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